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Coal mine lays off 115 more workers

Idled Elk Creek a huge hit to Delta County economy

The Elk Creek coal mine will be idled, and Delta County officials are scrambling to deal with additional fallout from a fire that closed two-thirds of the mine nearly a year ago.

Oxbow Mining LLC announced Monday it was idling the mine and laying off the 115 miners who remained on the job after the mine laid off 150 others earlier this year because of a coal-seam fire that sparked in January.

A crew of about 20 miners was expected to remain on to maintain the mine, and a corporate official stressed that Oxbow remains interested in producing Colorado coal.

Though Elk Creek Mine is located in Gunnison County, most of the miners work in Delta County, which absorbed the brunt of the first round of layoffs.

“This is definitely a fearful time, that’s for sure,” Sarah Carlquist, director of Delta County Economic Development Inc., said Monday soon after Oxbow announced its plans.

Delta County School District 50J this year approved a hiring freeze that was prompted largely by an enrollment drop of 107 students, which is about 2 percent of its total enrollment, said Kurt Clay, assistant superintendent.

Most of the enrollment drop was traced to miners leaving Delta County, Clay said.

“We lost quite a bit of money, obviously,” in state payments that are based on enrollment, Clay said.

District officials were in contact with mine officials, so the announcement wasn’t a complete surprise, Clay said.

Already the school district is considering what to do next, including instituting bigger class sizes, reductions in staff and combining schools, Clay said.

Delta County Memorial Hospital also saw a “an impact when the miners left,” though not on the scale of what happened to the schools, hospital CEO Jason Cleckler said.

“Still, these are good-paying jobs with good insurance,” Cleckler said. “The mines are very important to Delta County. It’s certainly a loss on multiple levels.”

The effects extend beyond the miners themselves, Clay said.

“There is a huge number of companies that serve the mines,” Clay said. “It’s a big part of our population.”

Miners earn on average $130,000 a year, Carlquist said, noting that as many as seven other jobs are dependent on mining jobs.

“Mining is always in the back of our minds,” when trying to evaluate the county’s financial state, Carlquist said.

Delta County has already felt the direct effect of the initial reduction in force by Oxbow with a significant decrease in sales tax, County Administrator Robbie LeValley said.

“We adjusted the 2014 budget already based on initial reports from the mines and looking at state and national market factors,” LeValley said.

Still, mine officials say they hope to return the mine to production.

“We remain committed to the region,” said Brad Goldstein, director of corporate affairs for Oxbow, which is owned by billionaire William Koch. “We have already prepared two longwall panels. We are trying to get another longwall so we can be back up and mining coal again. Longwalls take time to build.”

Longwalls are the industry term for the machinery that shears coal from the seam. Oxbow had to leave an operating longwall in place when it sealed off an area of the mine because of elevated levels of carbon monoxide, which suggested coal was spontaneously smoldering.

Longwalls similar to the one Oxbow left behind cost between $50 million and $100 million, officials have said.

The Elk Creek Mine was among the top producing underground mines in the country in 2008, when it produced more than 6 million tons of coal. At the time the mine employed more than 350 people.

Oxbow officials have been preparing for the mine to play out and have begun work to continue operations at nearby Oak Mesa in Delta County.

Oxbow has sought permits for more exploratory wells in the northern section of Oak Mesa, and officials hope to begin drilling in the spring, Goldstein said.

Still, it’s likely to take as long as seven years before production begins from Oak Mesa, Carlquist said.

Efforts are underway to obtain state and federal help to provide training and other aid to affected miners in hopes of keeping them in Delta County, Carlquist said.

“I am deeply concerned about the effect the Elk Creek Mine closure will have on the families supported by this mine as well as the North Fork Valley community as a whole,” said state Rep. Don Coram, R-Montrose. “I am saddened by the many hardworking Coloradans who are now out of work, and hope these families are able to remain locally employed to help support the economy for this region of Colorado.”